Financial Data and Key Metrics Changes - The commercial lines segment now comprises over 90% of the third quarter gross written premium and 95% of the gross earned premium, with pretax income of 90.2 million year-to-date [5] - Core income for the quarter was 0.34 a share, an increase of nearly 18.1 million or 14.4 million or 42 million better than a net loss of 0.64 a share in the same period last year [10] - The combined ratio for the third quarter improved over 70 points to 68.7% compared to last year [11] Business Line Data and Key Metrics Changes - The net loss ratio for commercial lines was 19.5% in the third quarter and 19.7% year-to-date, in line with expectations [6] - The commercial lines net expense ratio decreased to 33% in the third quarter and 35.6% year-to-date, down from 43% and 44.2% respectively last year [6] - The underlying combined ratio for the commercial segment was 48.9% in the third quarter and 54.3% year-to-date, down from 57.7% and 66.1% year-over-year [7] - Gross written premium for commercial lines increased by 22% through the third quarter and 31% year-to-date [8] Market Data and Key Metrics Changes - The total insured value for the commercial portfolio was down 14%, while the probable maximum loss at the 100-year return period decreased by 23% year-over-year [8] - Florida continues to be a hard market, with benefits from insurance reform leading to reduced litigation [8] Company Strategy and Development Direction - The company is divesting Interboro, its New York domiciled personal lines carrier, to focus on commercial lines [9] - The outlook for Florida's commercial marketplace remains unchanged, with expectations for a hard market in the near and intermediate terms [9] - The company launched an at-the-market common stock offering to raise between 20 million to support exposure growth and optimize reinsurance spend [15] Management's Comments on Operating Environment and Future Outlook - Management noted that Hurricane Idalia had a minimal impact, with current loss estimates well below the reinsurance attachment point [6] - The company expects to continue benefiting from the hard market conditions in Florida, which are conducive to outsized returns on capital [15] Other Important Information - Stockholders' equity increased to 2.78 a share, a 7.3% increase from the prior quarter [14] - Cash and invested assets totaled nearly 1.15 billion [14] Q&A Session Summary Question: Current quota share agreements and potential for a captive MGA - Management indicated that they have two 20% quota shares and view them as instrumental in the current catastrophe reinsurance program, with plans to reduce these over time [19] - The company has a Class B reinsurer domiciled in Cayman and plans to utilize it more extensively going forward [20] Question: Current book value of Interboro - The current book value of Interboro is approximately $23 million [21] Question: Split between price and volume in the increase of gross written premiums - The volume is down about 13% to 14%, while the rate is up around 30% [25]
United Insurance(ACIC) - 2023 Q3 - Earnings Call Transcript